ML20204G372
| ML20204G372 | |
| Person / Time | |
|---|---|
| Site: | Farley  |
| Issue date: | 04/25/1983 |
| From: | Clayton F ALABAMA POWER CO. |
| To: | Varga S Office of Nuclear Reactor Regulation |
| References | |
| GL-83-07, GL-83-7, NUDOCS 8305020456 | |
| Download: ML20204G372 (12) | |
Text
i Meiling Address
, Alabama Power Company 600 North 18th Street Post Offica Box 2641 Birmingham Alabama 35291 Telephone 205 783-6081 F. L. Clayton, Jr.
%%%'O %'"'
AlabamaPbwer the southern electic system April 25, 1983 Docket Nos. 50-348 50-364
' Director, Nuclear Reactor Regulation U. S. Nuclear Regulatory Commission Washington, D. C.
20555 Attention: Mr. S. A. Varga Joseph M. Farley Nuclear Plant - Units 1 and 2 Generic Letter No. 83-07 (Nuclear Waste Policy Act of 1982)
Gentlemen:
In accordance with the applicable requirements of P.L.97-425, the Nuclear Waste Policy Act of 1982, Alabama Power Company is actively and in good faith negotiating with the Department of Energy on an agreement for the disposal of spent nuclear fuel and/or high level _ radioactive waste. Attachment 1 is Alabama Power Company's response to a specific invitation by the Department of Energy to comment on the draft standard disposal contract. Attachment 2 is Alabama Power Company's submittal on the proposed disposal rulemaking. By entering into such negotiations l
with the Department of Energy, Alabama Power Company considers that the action required by Paragraph 3 of Amendment No. 28 to Facility Operating License No. NPF-2 is complete.
If you have any questions, please advise.
Yours very truly,
+ S W A ;<
.o I
o F.L.Clayton,J{
FLCJ r/MDR:1 sh-D20 Attachments cc: Mr. R. A. Thomas Mr. G. F. Trowbridge Mr. J. P. O'Reilly Mr. E. A. Reeves Mr. W. H. Bradford 8305020456 830425 PDR ADOCK 05000348 P
Alabama Power Company WM UTACMENT 1 t Offi Box 2 1 Birmingham, Alabama 35291 Telephone 205 250-1000 AlabamaPower the southern electrC system March 4, 1983 U. S. Department of Energy Procurement and Assistance Management Directorate Office of Procurement Operations Attn: Ms. Jan Atkinson Washington, D. C.
20585
Dear Ms. Atkinson:
In response to Mr. Hilary J. Rauch's letter of February 14, 1983, Alabama Power Company is providing comments on the draft standard con-tract as an individual potential purchaser of dispos &l services as well as jointly through EEI in accordance with the Federal Register instructions.
In regard to the specific additional administrative information requested to facilitate contract execution, the following is submitted:
1.
I anticipate that the contract will be executed by William 0. Whitt Executive Vice President Alabama Power Company
(
2.
The designated contact for contract discussions is Bruce E. Hunt Manager, Nuclear Fuel Southern Company Services, Inc.
Post Office Box 2625 Birmingham, Alabama 35202 205/870-6665
Page two Ms. Atkinson March 4, 1983 Since substantive comments and changes are being offered 3.
by the various affected parties, we cannot predict the content of the final standard contract, nor whether additional nego-tiations will be required. We intend to expedite the con-tracting process in order to finalize a contract prior to June 30, 1983, but cannot make any estimate at this time of when a signed contract could be returned.
Some fuel assemblies in our Farley Nuclear Plant Unit 1 4.
spent fuel pool have cladding damage. A quantity of fuel pellets as well as some cladding segments are separately If the final standard contract does not adequately contained.
address this area, special contract provisions may be required.
Provided the standard contract terms are acceptable, we are not aware of any other reasons the standard contract could not be used.
If any additional information or assistance is needed to facilitate the contracting process, please contact Mr. Hunt as noted above or me at 205/783-6190.
. Yours very truly, M.h.
M. D. Rickels Supervisor - Nuclear Fuels and Contracts NDR/cl cc: Mr. B. E. Hunt bc: Mr. R. P. Mcdonald Mr. O. D. Kingsley, Jr.
Mr. R. A. Buettner i
l l
w W
Mailing Address
. Alibama Power Company 600 North 18th Street P:st offica Bo:: 2641 Birminghim, Al:bamt 35291 Telephone 205 783-6081 grTAc14 MEh!T 2
. F. L Clayton, Jr.
0%#0*fff"'
AlabamaPower the southern electnc system March 4, 1983 Mr. Robert Morgan Project Director Nuclear Waste Policy Act Project Office Department of Energy 1000 Independence Avenue, S.W.
Room 7B-084 Washington, D.C.
.20585 Re:
Contract for Disposal of Spent Nuclear Fuel and/or High-Level Radioactive Waste
Dear Mr. Morgan:
Alabama Power Company
(" Alabama Power") is hereby sub-mitting its comments on the proposed rulemaking contained in 48 Federal Register 5458 entitled " Standard Contract for Dis-posal of Spent Nuclear Fuel and/or High Level Radioactive Waste."
Alabama Power is a public utility providing electric service at retail and wholesale in a large portion of the State of Alabama, and owns and operates the Joseph M.
Farley Nuclear Plant under licenses from the Nuclear Regulatory Com-mission.
We are, therefore, vitally interested on behalf of our Company and its customers in the contract proposed to be adopted by the Department of Energy
(" DOE") as the standard contract for disposal services to be provided pursuant to the authorization of the Nuclear Waste Policy Act of 1982 (the "Act").
In general, Alabama Power supports the comments filed in connection with this proposed rulemaking by the Edison Elec-tric Institute ("EEI") and, in fact, we participated in their development.
In a few instances, however, as pointed out below, as an individual utility we would suggest approaches different from the view supported by EEI.
In other instances, we are commenting specifically on particular items in which our views coincide with those presented by EEI.
Our addi-tional comments are intended to highlight items of particular importance to us and not to suggest that other items on which EEI commented are not equally deserving of consideration.
Mr. Robert Morgan March 4, 1983 Page 2 We view the goal of the standard contract to be developed by DOE as being to establish fair and equal treatment for all users of the disposal services being offered by DOE, consis-tent with the requirements and the spirit of the Act.
- Thus, we feel the spirit of :he Act should not be distorted by an overly technical interpretation of the Act that results in favoring some Purchasers of disposal services at the expense of others.
It is in this spirit that we offer the following observations.
1.
Fee -
Articles VIII A(2) and (4)
Section 302 (a) (3) of the Act states, without ambiguity, that the fee for spent nuclear fuel is to be the equivalent of an average charge of one mill per kilowatt hour for elec-tricity generated by such spent nuclear fuel.
We have re-viewed the methods of calculation identified in the proposed rulemaking for the determination of the fee for fuel used to generate electricity prior to April 7, 1983 and conclude that none of the four methods meet adequately the statutory cri-teria.
In particular, we find that the charges which would be imposed on Alabama Power under these methods do not reflect one mill per kilowatt hour times the electricity generated in and sold from the Farley Plant prior to April 7, 1983.
It is our position that the most straightforward and equitable method for determining the fee for disposal of nuclear fuel used to generate electricity prior to April 7, 1983 is to base the fee directly upon one mill for each kilowatt hour of elec-tricity produced by each reactor prior to that time.
This methodology would assure that the total amount due is appor-tioned between Purchasers of disposal services in accordance with the statutory principle of the one mill per kilowatt hour equivalence.
This would insure that the costs are equitably borne by the customers who received the benefits of that gen-eration.
It should be noted that the determination of the quantity of electrical generation less station service for each nuclear unit is readily obtainable and capable of audit by DOE.
This would make determination of the total amount owed for past generation a simple task and would ensure that the total amount received by DOE from each Purchaser is proper.
(a)
Spent Fuel:
Absent use of an approach which is tied explicitly to one mill per kilowatt hour, anomalous and
. ~
4 Mr. Robert Morgan March 4, 1983 Page 3 inequitable situations will develop.
In particular, with re-spect to fuel removed from the reactor prior to April 7, 1983 which is later reinserted for generation of energy after that date, the disposal fee for such fuel will be disproportionate.
Reinsertion of spent fuel is an event likely to occur but dif-ficult to predict.
Fuel may be reinserted for a number of reasons; not only planned reinsertions for prudent fuel man-agement but also unplanned reinsertion to replace damaged fuel or reinsertions required to achieve acceptable core operating limits while still achieving desired operating cycle lengths.
Under the standard contract set forth in the proposed rule, when such fuel is reinserted in the core, a Purchaser will pay one mill per kilowatt hour charge on all future generation from that fuel in addition to the one-time fee already as-sessed.
The inequity in this situation is particularly onerous where, as in our case, the charge for spent fuel under each of the proposed methods is already greater than one mill per kilowatt hour.
If the original charge had been based ex-plicitly on one mill per kilowatt hour actually generated, the charge for future energy generated by the reinserted fuel would not be inequitable.
Past and present generation would be assessed on the same basis and no adjustment would be necessary.
In the alternative, if the fee basis finally adopted by DOE is not explicitly predicated on one mill per kilowatt hour for energy generated by fuel removed from the reactor, a mechanism must be adopted to provide appropriate charge ad-justments for reinserted fuel to avoid double fees for dis-posal of that specific fuel.
Such adjustments should credit additional charges paid for generation a f ter April 6, 1983 from reinserted fuel against the one-time fee owed for that spent fuel as of April 6, 1983.
Such credit would be applied only to the extent required to reduce the total final charge for that fuel to the" amount equivalent to the one-time fee based on the reinserted fuel's final discharge burn-up.
Should DOE determine finally that the fee for fuel removed from the reactor cannot be predicated on one mill per kilowatt hour of electricity generated by such fuel, our exam-ination reveals that the method of establishing that fee as set forth in the proposed contract would constitute the second best alternative.
This method would approach, indirectly, a one mill per kilowatt hour charge as directed by Congress.
Another alternative which could be utilized to achieve the
Mr.. Robert Morgan March 4,.1983 Page 4 Congressional intent is Alternative Method 2 described in the proposed rulemaking, but only 'if modified to eliminate the arbitrary:33% efficiency factor and to recognize station ser-
- vice in the~ formula.
Alternative Method 2 should incorporate, in lieu of the efficiency factor, the unit's actual net elec-trical to thermal conversion factor, where the actual conver-i
'sion factor equals total cumulative electrical generation i
prior to April 7; 1983, less station service,' divided by the total thermal generation produced by the unit's reactor core.
prior to that date.
We would again emphasize that.these methods are in-ferior alternatives to achieving the intent of the Act with
' respect to_ spent fuel.
Of greater equity is the direct, 7
straightforward use of a charge explicitly based on one mill per-kilowatt hour actually generated.
(b)
Fuel in-the Reactor as of April 7, 1983:
With re -
spect to. fuel.in the reactor as of April 7, 1983 which was used to generate electricity prior to April 7, 1983, we would emphasize that all of the four methodologies suggested in the proposed rulemaking are inappropriate, particularly Alterna-tive Methods 1 and 3 and the method contained in the proposed contract.
Fuel in this category will continue to generate electricity and a fee will be assessed subsequent to April 6,
-1983 at the one mill.per-kilowatt hour rate based on actual generation.
The only appropriate approach is to predicate the charge attributable to fuel burn-up prior to April 7','1983 on the same_ basis.
To do otherwise will resulc in severe in-j equities.similar to those discussed above regarding reinserted l
fuel. In'the case of the incore fuel, it is certain that the fuel will be subject to additional charge.
For example, on April 7, 1983, one reload of. fuel in Farley Unit No. 1 will have been in operation for less than one month.
If this fuel
. is subjected to the one-time charge using Alternative Methods 1 or-3, or the method prescribed in the proposed contract, l
Alabama Power will Ime forced to pay a fee for disposal of such I
fuel in an amount equal to approximately twice the charge en-
[
visioned by. Congress.
Not only would the one-time fee have been' assessed as though the fuel had been finally discharged, it would also be assessed the one mill per kilowatt hour rate as it is used to generate electricity after April 6, 1983.
If Alternative Method 2 were applied, the result would be less inequitable; however, unless the' changes noted t
n
.e,,
,,,-.-n,._
Mr. Robert Morgan
. March 4, 1983 Page.5 L
above are made to eliminate the arbitrary efficiency factor utilized'in that formula, even that method =would result in-charges in excess of one mill per kilowatt hour.
In summary, we believe that both the spent fuel discharged from the reactor prior to April 7,-1983 and the fuel in the reactor as.of April 6,--1983 should.be'assessedLat
- one mill per kilowatt hour based.upon the actual kilowatt hours (less station service). generated by the reactor unit in question.
It is straightforward,. equitable, consistent with the Act and does not lead to excess charges on reinserted-spent fuel or on the fuel which remains in the reactor after
' April 6,E1983.
2..
Payment -- Article VIII B.2 Under both options provided in the proposed contract for
)
i
- payment of fees for spent nuclear fuel discharged prior to
~
April 7, 1983, reference is made to "the. fee schedule rate in effect at time of payment".
This phrase suggests that the fee for such spent nuclear' fuel may be subject to change prior to the tima payment is made.
We submit-this suggestion is inap-propriate..
The concept of a "one-time fee" as discussed in l
. Article VIII A.'2 of the proposed contract, and more -impor-F tantly in the Act itself, implies that no changes will be made in the future for disposal charges associated with spent-fuel dischargedLfrom the reactor prior to April 7, 1983.- We there-fore suggest that this phrase be deleted in Article VIII B.2.a and B.2.b.
If the intent in including this phrase is to imply that interest is to accrue on the unpaid balance of' the fixed I
one-time fee, we feel the chadge suggested in EEI's comments
. regarding escalation based on the Quarterly Treasury rate ap-propriately' addresses the issue.
We also endorse.the concept of not having to select a specific payment optionRat the time of contract execution.
Moreover, if interent is to be incurred on any unpaid balances L
for this~one-time fee, it would not seem necessaryLfor a Pur-chaser to select, at the time of' contracting, the-payment op-tion which is ultimately desired.
Purchasers should be al-
'. owed to delay the selection of a payment option so long as all of the fee and interest thereon is paid in full prior to the delivery of that spent nuclear fuel to DOE.
l-l l
L
Mr. Robert Morgan March 4, 1983 Page 6 3.
Credits to One Mill Charge It has been suggested that the standard contract should contain provisions for tempering the one mill per kilowatt hour fee imposed under the contract to accommodate the fur-nishing by a Purchaser of services, equipment or materials.
Alabama Power feels such a provision would be inappropriate in view of the provisions of the Act, and this mechanism could lead potentially to abusive administrative practices under which subjective factors determine the level of the fee which each user of services will pay.
The Act explicitly provides that the fee for disposal services for fuel from which elec-tricity is-generated subsequent to April 6, 1983 shall be 1.0 mill per kilowatt hour as such fee may be adjusted from time to time.
No more than that charge may be imposed - and no less than that charge is to be imposed.
Under the full cost recovery concept, to the extent the fee to any Purchaser is reduced to reflect the value of ser-vices, equipment, or materials which the Purcnaser furnishes, that reduction in fee impacts other users of the service.
He feel, therefore, that DOE's standard contract should not pro-vide for adjustments to the statutory fee to individual Purchasers.
i This is not to say that if services are rendered to DOE or material or equipment are furnished to DOE by a Purchaser that Purchaser should;not be compensated.
If DOE is author-ized under the-Act to procure such services, equipment or ma-terial using monies in the Nuclear Waste Fund, it should not be precluded from dealing with a " Purchaser" of DOE services in securing those items.
However, such procurement, using Nuclear Waste Fund monies, should be separate and apart from the standard contract for sale of the disposal services by DOE.
It is also appropriate that in the event DOE recovers any of the materials contained in the spent nuclear fuel delivered to Doe, the value of such material should be credited back to the Fund and reflected in the overall fee for spent nuclear fuel and high level waste.
4.
Indemnification Against Nuclear Hazards We are particularly concerned that the standard contract fails to address completely the issue of DOE's indemnification
~.
k Mr._ Robert Morgan March-4, 1983 Page 7 of Purchasers against the risks of nuclear hazards arising from the performance by DOE of services under_the contract.
We understand that while the proposed contract addresses in-demnification agreements between DOE and its contractors, no explicit indemnification exists in the proposed contract where DOE is'providing the service and a contractor is not involved.
4 DOE is clearly authorized under the Act to take full responsi-bility for all consequences of its disposal of spent nuclear fuel.
To remedy this concern, we endorse the observations of EEI that DOE should obligate itself to provide Purchaser with protection equivalent to that which would have been provided E
under the Section 170 (d) indemnity provisions if it operates b
the facility.
Further, if Section 170(d) were to expire (without Congressional action.on extension) on August 1, 1987, or.should it otherwise expire, indemnity protection for nu-
' clear hazards must be assured in some alternate manner.
We concur with'EEI's suggestion that DOE should obligate itself, in the event of expiration of Section 170 (d) protection, to provide Purchaser protection equivalent to the protection af-forded Purchaser under the Section 170 (d) indemnity.
l We would note in this connection the need to assure that the indemnity obligation survives the stated term of the con-tract.
To achieve _this, the following sentence should be added to Article III - Term:
The' provisions of DOE under Article XIV of this Agreement shall continue beyond the term of this Agreement.
5.
Acceptance Criteria, Article VI. B Consistent with DOE's obligation to take title to, to transport, and to dispose lof all spent nuclear fuel and high level waste, there should be no waste nuclear material which i
will be ultimately unacceptable to DOE provided such material is ' properly identified, packaged, labeled, scheduled, and loaded by the Purchaser pursuant to applicable regulations.
Accordingly, we specifically endorse EEI's comments regarding
- Article VI.
B.
of the proposed contract and EEI's comments regarding Appendix E and Appendix F.
In particular, we want to-emphasize-that DOE's obligation to remove spent nuclear fuel under the contract should~ remain regardless of the form or condition of the spent nuclear fuel.
Thus, even if the fuel is not structurally intact, the contract for disposal i
s 4
,--s-
,-,e,
- + - ~
,w
.-~en<
--.m-
-w-..,,
- ~,
-r- - - + - -,
g-
s Mr. Robert Morgan March 4, 1983 Page 8 services should contain a clear obligation on DOE to accept such fuel for disposal.
This would include fuel pellets which have escaped from the cladding, fuel rods which have been consolidated, and other instances where fuel does not meet a standard specification.
Moreover the contract should contain a clear obligation by DOE to provide appropriate containers as they may be required.
6.
Delays Clause - Article IX We are concerned by the possible ambiguity of Article IX of the proposed standard contract.
This section of the pro-posed agreement is intended to excuse delays, not failures to perform.
The first sentence of Article IX should be revised as follows:
Neither the Government nor the Purchaser shall be liable under this contract for damages caused by delays in the performance of its obligations hereunder, if such delay arises out of causes beyond the control and without the fault or negligence of the party delayed.
This change will make this sentence consistent with the last sentence of Article IX which requires the parties to perform, notwithstanding excused delaya, on an adjusted schedule.
7.
Spent Fuel Receipt Rate at DOE Facility The draft contract recognizes that the annual capacity of the DOE disposal facilities may not be adequate to handle the level of deliveries of spent nuclear fuel desired by the holders of suen fuel.
In this regard, we would like to empha-size the importance of the annual receipt rate of the disposal facility being' designed, to the extent practicable, to be com-mensurate with the levels of spent nuclear fuel being gen-erated annually and the need to also reduce the back-log of spent fuel as expeditiously as possible.
Consistent with Section 302 (a) (5) of the Act, the contract should express the intent of DOE to take title to spent nuclear fuel as expedi-tiously as practicable upon request of the generator or owner.
In addition, we support EEI's comments on the proposed priority system for allocation of spent fuel deliveries and
~
o L
Mr. Robert Morgan March 4, 1983 Page 9 the concept of allowing exchanges of such allocations between different Purchasers.
Clearly such allocation exchanges should at least be permitted between reactor units on Pur-chacer's own electric system.
CONCLUSION Alabama Power appreciates the opportunity to provide comments on the draft standard contract.
Since DOE has chosen to develop the standard contract through rulemaking with the stated intent to use the form contract to the maximum extent practicable, we consider these comments as our primary means of negotiating a final contract acceptable to both parties.
We-request that they be considered accordingly.
Yours very truly, ALABAMA POWER COMPANY I
~
f C-(av.1c
/
f m
F.
L.
Clayton,.Jr.
Senior Vice President i
e